Sell Mazagon Dock Shipbuilders, target price Rs 600: ICICI Securities

ICICI Securities has sell call on Mazagon Dock Shipbuilders with a target price of Rs 600. The current market price of Mazagon Dock Shipbuilders is Rs 765.95.

Mazagon Dock Shipbuilders, incorporated in the year 1934, is a Small Cap company (having a market cap of Rs 15384.91 Crore) operating in Defence sector.

Mazagon Dock Shipbuilders key Products/Revenue Segments include Ship Construction, Spares & Scraps, Ship Repairs, Other Operating Revenue and Scrap for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 1991.75 Crore, up 6.74 % from last quarter Total Income of Rs 1865.97 Crore and up 20.31 % from last year same quarter Total Income of Rs 1655.57 Crore. Company has reported net profit after tax of Rs 337.26 Crore in latest quarter.

The company’s top management includes Mr.Narayan Prasad, Mr.Sanjeev Singhal, Mr.Jasbir Singh, Mr.Sanjay Jaju, Mr.Biju George, Mr.Vasudev Puranik, Mr.Mallikarjunarao Bhyrisetty, Mr.Shambhuprasad Tundiya, Mrs.Jagjeet Kaur Neeru Singh. Company has JCR & Co. as its auditors. As on 31-12-2022, the company has a total of 20 Crore shares outstanding.

Investment Rationale
The brokerage believes shipbuilders are at the risk of reaching peak execution in FY25/FY26 as the current orderbook will be past 65% execution (peak earnings) at that stage. The static budget for naval fleet spending implies that orders for high-value items such as Scorpene grade submarine, Nex-Gen Corvettes and Destroyers are likely to be delayed. This would keep utilisation at shipbuilders, low post FY25.

Promoter/FII Holdings
Promoters held 84.83 per cent stake in the company as of 31-Dec-2022, while FIIs owned 3.29 per cent, DIIs 0.26 per cent.